PPC releases operational update for the 4MFY20

South Africa's PPC has released an operational update for the four months to 30 July, noting a 5-10 per cent increase in group EBITDA due to positive price momentum in South Africa and cost optimisation initiatives.

Average cement prices in its southern Africa region (including Botswana) rose 7-8 per cent in the period, however cement sales declined 10-15 per cent YoY on the back of a decrease in domestic demand. The company noted that importer and blender activity contributed to the competitive operating environment in the region, with cement imports between January-June 2019 climbing 22 per cent YoY to around 640,000t.

"The Concrete Institute (TCI), on behalf of the domestic cement industry, submitted an application to ITAC highlighting the impact of imports on domestic cement production. The industry is also engaging with the relevant authorities to ensure that blended cement meets the requisite standards," said the company.

In its rest of Africa outlook, PPC announced it has seen a 25-30 per cent contraction in sales volumes in Zimbabwe for the 4MFY20. Its Rwandan subsidiary has completed the first phase of its debottlenecking project resulting in higher sales, which advanced 35-40 per cent YoY in the four-month period. Elsewhere, the EBITDA of its business in the DRC has tracked below last year as a result of a competitive pricing environment in the first two months of the fiscal year. In Ethiopia, its Habesha operations has not reached optimal performance and faced pricing challenges, therefore the company will focus on plant optimisation and route-to-market strategies.